This Week in Forex Trading: Yen in Trouble?

The week behind us has seen quite a few events, but it is the future that we need to warn about – especially with positions involving the Japanese Yen. On a more different note, it seems that financial markets in general have a star on the rise: Janet Yellen is becoming quite a celebrity after her push for hiking the Fed rate – now even indices are responding well to her! But first, let’s see how the major currency pairs have been doing.

The Week Behind Us:

EUR/USD: Ever since yesterday’s breach when it reached 1.1240, EUR has returned to its usual routine. Nobody is really surprised that nothing is pushing it down in a consistent manner – the lowest point was on Wednesday when it fell to 1.1119. This is why a move below 1.1100 is extremely unlikely in the near future, unless something extraordinary happens. Now we are looking at a 1.1120/1.1290 range in the long run – at least a couple of weeks.

GBP/USD: Thursday saw the end of a momentum so anyone who took profit at 1.3035 was extremely lucky – or knowledgeable. After that, GBP strengthened up, but there is still a risk of a short-term low. In fact, even breaking above the 1.3120 is not going to be that shocking in the next few days. Unless the pound stays under 1.3035 which could also happen.

AUD/USD: The Australian currency has seen some rough times last week, falling as low as 0.7443 and this rough patch lasted more than anyone really expected. For signs of recovery, best wait until it closes above 0.7675 in order to confirm the rising trend. The major resistance zone is 0.7740/60 and it should not get stronger than that, at least not anytime soon.

NZD/USD: NZD saw a quick rise yesterday to 0.7374 but that does not mean you should hold your breath waiting for 0.7485. We are most likely looking at a new range, 0.7240 and 0.7380 in all likelihood.

USD/JPY: The outlook on US currency did turn bearish on the whole, but the recently the pair has been extremely oversold. Still, at this rate we cannot rule out going as low as 99.50/55. If you want to confirm a short-term low, wait for a move above 101.50.

The Yen Takes a Fall – on Purpose?

Recently, many Japanese officials announced they could step in to save the exporters from a strong Yen that is ruining their profits. Since Fed declined to raise the interest rates, everybody started focusing toward the Yen, which drove the prices in turn.

Yoshihide Suga announced new measures if this trend continues, so it is certain that a fall in value is about to happen. Since the Japanese companies favor a weak domestic currency, it is likely that the pressure they are mounting on the government will pay off.

Yellen for President?

The way things are, if Janet Yellen runs for president, she might get a bunch of votes from Wall Street traders, and anyone interested in currencies and indices alike: on Thursday both the Dow and S&P 500 went positive in a month that is traditionally against either of them. Yellen is believed to advocate a stance for interest rate hike, but the rest of the Fed begs to differ for the time being.

Still, gradual hikes might be possible over the course of the next two years. This is exactly what the investors needed to hear and it made for a more effective market stabilizer than anything anyone else could have done. Neither Trump nor Hillary would have raised as much fuss about any of this, and it just goes to show you that the right person for the job is better than any misguided party allegiance.

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